November 10, 2014 Admin | November 10, 2014 Buy and hold is a very effective and profitable strategy when investing in markets all over the world? Why?
3 thoughts on “November 10, 2014”
Because it is next to impossible to time the markets. If you hold on to an investment you are much more likely to make money than if you were to buy and sell regularly.
If you buy an stock or bond or security and hold it for a long period of time you will capture its long run average return. Which eliminated most of market risk. This is how you take most of the risk out of long term index investing. You do not try to jump in and out of the markets because you never know when to get in or out and the money you have will be moving a lot if you buy and sell constantly. If you buy and sell constantly you will get short term capital gains which you will have to pay taxes on. You want to capture the 10% return the investment may have over its lifetime and not the -10% or 5% or 15% or whatever it has for just that year, you want something that will be worth it 10 to 20 years down the road.
Well said, gentlemen. The article below provides the data that reinforces the answers Brennan and Garrett provided. Awake!